Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/19799 
Year of Publication: 
2005
Series/Report no.: 
Proceedings of the German Development Economics Conference, Kiel 2005 No. 6
Publisher: 
Verein für Socialpolitik, Ausschuss für Entwicklungsländer, Hannover
Abstract: 
In transition and developing countries, we observe rather high levels of corruption even they have democratic political systems. This is surprising from a political economy perspective, as a majority of the people generally suffers from high corruption levels. Our model based on the fact that corrupt officials have to pay an entry fee to get lucrative positions. In a probabilistic voting model, we show that a lack of financial institutions can lead more corruption as more voters are part of the corrupt system. Well-functioning financial institutions, in turn, can increase the political support for anti-corruption measures.
Subjects: 
Corruption
Financial Markets
Institutions
Development
Voting
JEL: 
D72
O17
D73
Document Type: 
Conference Paper

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